Defense Secretary Robert Gates canceled a $35 billion air tanker competition between Northrop Grumman and Boeing for now, saying the contest had become too complex to be decided before the Bush administration leaves office. Is this a boon for Boeing who was asking for more time?

WASHINGTON
(Reuters) - Defense Secretary Robert Gates on Wednesday canceled a $35
billion air tanker competition between Northrop Grumman Corp and Boeing
Co for now, saying the contest had become too emotional and complex to
be decided before the Bush administration leaves office in January.

The decision would provide the next administration with full
flexibility regarding the requirements, evaluation criteria and budget
decisions involved in the competition, the Pentagon said in a statement.

"It is my judgment that in the time remaining to us, we can no
longer complete a competition that would be viewed as fair and
objective in this highly charged environment," Gates said. "The
resulting 'cooling off' period will allow the next administration to
review objectively the military requirements and craft a new
acquisition strategy for the KC-X."

The Pentagon also said that any contract award would have faced possible protests by the losing bidder.

"Over the past seven years the process has become enormously complex
and emotional - in no small part because of mistakes and missteps along
the way by the Department of Defense," Gates said.

Pentagon officials concluded that the current fleet of KC-135
tankers, which are over 47 years old on average, could be maintained to
meet Air Force needs for the near future, and would request funding in
the fiscal 2009 budget and "follow-on budgets" for that purpose, the
statement said.

In addition, the Pentagon would make recommendations about what to
do with tanker funding already mapped out in the fiscal 2009 budget, as
well as the budget for the next six years that is currently being
drafted by the Defense Department.